Realizing Gender Diversity on Corporate Boards

Abstract

This study examines the effectiveness of soft law through scrutinizing national policies for enhancing the proportion of women on corporate boards. Soft laws, which have less precision and obligation dimensions than conventional laws, are widespread within financial regulation. Despite this widespread use there relative performance is unexplored. To resolve this, we undertake a comparative examination of 14,012 firms from 99 nations, using a three-stage analysis to examine the effect of different policies, their format and influence of institutional factors on female board representation. We report that soft laws are effective for promoting gender equality on corporate boards. The effectiveness of policies is strongly influenced by the enforcement, implementation and compliance dimensions of policy, and institutional factors. Policies are most potent when enforced using a moderate level of sanctions, with a longer compliance period and a diversity target less distant from a firm’s precedent gender diversity level.